India: Delhi High Court Holds That No Copyright Lies With Any Work Registrable Under The Designs Act

In the recent case of Holland Company LP & Anr. vs. S.P.
Industries1, the Delhi High Court vide its order
dated July 27, 2017, disposed off the application filed by the
Holland Company LP seeking injunction to restraining S.P.
Industries from manufacturing or selling Automatic Twist Lock
(hereinafter referred to as "ATL") and spare parts, as
well as to restrain them from reproducing the ATL spare parts in
3-D form, from the 2-D artistic work of Holland Company LP in the
form of the industrial drawings.

Brief facts-

The present suit was filed by Holland Company LP (hereinafter
referred to as the Plaintiff No. 1) which deals in the railways
supply industry for car/wagon components, and manufactured and
supplied the Indian Railways with ATL, which is a system for
securing cargo containers to a support. The Plaintiff No. 1 claimed
to have a copyright over the industrial drawings of the ATL and
spare parts thereto. M/s. Sanrok Enterprises (hereinafter referred
to as Plaintiff No. 2) is the exclusive licensee of the Plaintiff
no. 1 in India for manufacturing, selling, marketing and servicing
Plaintiff no. 1's ATL and spare parts. The Plaintiffs had
previously supplied the drawings of the ATL device and its spare
parts to Indian Railways, who thereafter used it on its container
flat wagon.

Subsequently, the Eastern Railway, Sealdah Division had floated
a tender for carrying out repairs, replacement of spare parts and
servicing of the defective parts of the ATL devices. S.P.
Industries (hereinafter referred to as the 'Defendant') had
successfully outbid Plaintiff No. 2, and was awarded the aforesaid
contract. The Plaintiffs claimed that the Defendant does not have
the requisite know-how to replace and repair the spare parts of the
ATL device which was supplied to the Indian Railways by the
Plaintiffs, and that since they have artistically created the ATL,
they have the right to maintain and sell the spare parts of the
same and no other party has any right over the same. Accordingly,
the Plaintiffs instituted the suit for permanent injunction before
the Delhi High Court.

Vide its order dated May 20, 2014, the Hon'ble High Court of
Delhi had dismissed the application filed by the Plaintiffs under
Order 39 Rules 1 & 2 of the Code of Civil Procedure, 1908
(hereinafter referred to as the CPC) seeking permanent injunction
against the Defendant. Aggrieved by the said order, the Plaintiff
filed an appeal bearing no. CS (COMM) 1419/2016 wherein vide order
dated September 12, 2014, the Hon'ble Court was directed to
decide the application afresh.

Contentions of the Plaintiffs:

The Plaintiffs claim that the spare
parts which are the subject matter of the above mentioned tender
are components of ATL devices manufactured and supplied by the
Plaintiffs, who also claim to have a patent over the said device
(an application for registration of the patent has been moved and
published) and copyright over the industrial drawings of the ATL
and its spare parts.

That since the Plaintiffs are the
real owners of the ATL devices and spare parts thereof, and since
the Plaintiffs possess copyright and patent over the same, no third
party has the right to sell, manufacture, offer to sell or
advertise ATL devices or spare parts thereto.

The Plaintiffs held that the
Defendant has intentionally, deliberately, knowingly and willfully
offered its substandard products and services to be used in Indian
Railways.

That a combined reading of Section 2
(c), Section 13 (1) (a) and Section 14 (c) (i) (B) of the Copyright
Act, 1957, shows that a copyright exists in engineering
drawings/technical drawings under the category of Artistic Works,
which includes the exclusive right to depict the drawings in three
dimensions. That such engineering drawings/technical drawings need
not possess any artistic qualities to claim protection under
Section 2 (c) of the Copyright Act, 1957.

That the Designs Act, 2000, features
"appeal to the eye alone" and it does not apply to
"functional" features. It is submitted that the Designs
Act, 2000, therefore, is not applicable on the
industrial/engineering drawings and technical drawings.

That in a case where the owner
neither relinquished nor entered in public domain its copyright, it
cannot be said that the work has entered in public domain.

Contentions of the Defendant

That industrial drawings are not an
artistic work and, therefore, no copyright exists. The Plaintiffs
are not the author of the work and hence, by necessary inference,
are not entitled to protection under the law. Even if it was
presumed that the Plaintiffs are the authors of the industrial
drawings of the ATL, the same are capable of being registered under
the Designs Act, 2000, are exempted from the purview of the
Copyright Act, 1957.

That by virtue of Section 15 of
Copyright Act, 1957, no copyright exists in any drawing or design
once the production has been done more than 50 times by an
industrial process using such drawing or design, and that the
Plaintiffs have themselves admitted that they have supplied ATL
devices to the Railways and thus by using drawing they have
reproduced more than 50 articles.

That having lost the tender, the
Plaintiffs cannot claim to have exclusive rights to repair and
replace the ATL devices which belong to Indian Railways. Further,
it was contended that the Plaintiffs also cannot be said to have
exclusive intellectual property right over the said drawings since
these drawings have been published and are readily available in the
market.

Observations of the Court:

"A conjoint reading of
Section 2(d) of Designs Act, 2000, Section 14(c) and 15(2) of the
Copyright Act, 1957, makes it amply clear that where a design of an
article is prepared for the industrial production of an article, it
is a design and registrable under Designs Act and under Section
14(c), the author of such design can claim copyright, however,
since such a design is registrable under the Designs Act, and if
such design has been used for production of articles by an
industrial process for more than 50 times by the owner of the
copyright, or, by any other person with his permission, then such
person ceases to have copyright in such design."

"......Plaintiffs had
prepared the engineering drawings for the purpose of production of
ATL devices. The industrial drawings are, therefore, or a design of
the ATL device which the Plaintiffs had supplied to the Railways
under a contract given to them by the Railways. The drawings of the
ATL devices of the Plaintiffs, therefore, are registrable under the
Designs Act. The said drawings have not been registered under the
Designs Act. The Plaintiffs have also not disputed the fact that
while using these engineering drawings, it had used for more than
50 ATL devices by an industrial process and, therefore, it is clear
that it has used these engineering drawings for more than 50 times
in an industrial process. By virtue of Section 15(2) of Copyright
Act, therefore, even if assuming the Plaintiffs had a copyright in
these engineering drawings, it ceases to have the
same."

"...The Plaintiffs have not
made the Railways a party to the suit although in the facts and
circumstances of the case it is a necessary party because prima
facie it is the Railways who have used the engineering drawing of
the ATL devices for inviting tenders..."

Held:

"For being entitled to interim injunction under Order
39 Rule 1 and 2, the Plaintiff is required to show a strong prima
facie case which means the Plaintiff is required to show that it
has a right which needs protection. The Plaintiffs have failed to
show any prima facie case in their favour. In the light of the
same, the application of the Plaintiffs under Order 39 Rules 1 and
2 CPC stands dismissed."

Footnote

1. CS (COMM) 1419/2016

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